Indian equities recover some ground after crash (Roundup)October 16th, 2008 - 7:24 pm ICT by IANS
Mumbai, Oct 16 (IANS) Marked by volatile trading, Indian equities opened sharply lower and dipped further Thursday, on growing fears of a recession in the US, but staged a recovery led by realty stocks before the closing bell to salvage a better part of the losses.The upturn, however, was not strong enough to prevent the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) from ending with a loss of 227.63 points, or 2.11 percent, at 10,581.49 points, against the previous close at 10,809.12 points.
The index, at one point, was precariously close to dipping to the feared four-digit mark at 10,017.80 points, which meant a loss of a whopping 791.32 points over the previous close during intra-day trading.
Only four out of the 13 sector-specific indices of the BSE, led by that for realty, up 5.15 points, managed to end in the green, with as many as nine such indices led by that for oil and gas ending in the negative territory, data with the exchange showed.
Curiously, the gainers and losers among the 30 stocks that make up the Sensex were quite evenly poised in a ratio of 14:16. While Reliance Communications, up 9.80 percent, led the gainers, the losers were led by Hindalco, down 12.15 percent.
At the National Stock Exchange (NSE), the broader 50-share S&P CNX Nifty index ended with a loss of 2.07 percent at 3,269.60 points.
Market analysts said the shadow of US recession and the crash in other markets weighed so heavily on the mood that investors chose to ignore the steps by the Indian government and the central bank to infuse more liquidity into the system.
The government and the central bank had Wednesday taken further steps to ease the flow of credit, with as much as Rs.650 billion ($15.5 billion) released into the system to address the prevailing financial crunch, which was welcomed by industry.
Investors also seemed to have ignored fresh data on wholesale price index, as per which India’s annual rate of inflation had eased to 11.44 percent for the week ended Oct 4, from 11.80 percent for the week before.
Markets across Asia had also plummeted on opening Thursday, dragged by US retail sales data and on concerns about whether bailouts of banks can rescue financial markets and avert a recession.
Japan’s Nikkei, Hong Kong’s Hang Seng, China’s Shanghai Composite, Singapore’s Straits Times Index, Taiwan’s Taiex, South Korea’s Kospi and New Zealand’s NZX 50 had all followed the crash of Wall Street’s Dow Jones Industrials.
Foreign funds, which have been the main drivers of India’s stock market upswing in recent years, were net sellers of equity in Indian bourses on each of the four days of trading this week, pulling out over a billion dollars.
These foreign institutional investors have been net sellers of equity worth $1.97 billion in October and $11.09 billion during the calendar year, latest data with the markets watchdog showed.